State Campaign Finance Laws Under Attack

In recent weeks, there have been a number of developments related to legal battles over state campaign finance laws, most notably in Arizona, Connecticut and Florida. In particular, parties have been looking to overturn state laws that provide matching funds when one candidate exceeds a certain spending threshold. These laws are designed, at least in part, to allow a candidate who is going up against a prolific fundraiser or self-financed candidate to enter into the state's public financing system and receive public funding that will help level the playing field. 

In 2008, Arizona's Goldwater Institute challenged the constitutionality of that state's matching funds statute. (Click here for more background.) In McComish v. Bennett, a federal district court judge agreed with the plaintiffs that the matching funds provision violates the First Amendment. The Ninth Circuit then reversed (surprise, surprise). Then, things get a bit confusing. To simplify, plaintiffs appealed to the Supreme Court, which then stayed the Ninth Circuit decision, meaning Arizona's public financing system, as it relates to matching funds, is temporarily out of commission. Many have said that the Court's stay means the High Court will likely take up the case next term.

Just last week, another significant decision came down, this time relating to Connecticut's public financing system. The law firm Bracewell & Giuliani released an update that summarizes the background and decision nicely:

In Green Party of Connecticut v. Garfield (09-3760-cv) ("Green Party I"), the court found unconstitutional the "trigger provisions" in the Citizen's Election Program ("CEP") section of Connecticut's Campaign Finance Reform Act ("CEFRA"), which automatically provide additional funds to candidates who participate in the state's public funds program when the expenditures of privately-funded opponents or independent third parties exceed a certain threshold. [Footnote omitted.] Alternatively, the court ruled that CEP's qualification criteria and distribution formulae, which determine what candidates qualify to receive matching funds and in what amounts, were not unconstitutional as they did not discriminate against minor party candidates.

CEFRA was first enacted in 2006 in response to various corruption scandals involving Connecticut politicians. The Second Circuit acknowledged that, pursuant to the seminal Supreme Court case of Buckley v. Valeo, the public financing of candidates is constitutional. However, the court sided with the plaintiffs, which included the Green Party of Connecticut and the Libertarian Party of Connecticut, who argued that the trigger provisions were tantamount to unconstitutional penalties.

In reaching this conclusion, the court analogized the trigger provisions to the "Millionaire's Amendment" to the McCain-Feingold law at issue in Davis v. Federal Election Commission, 128 S. Ct. 2759 (2008). The Supreme Court found the Millionaire's Amendment a substantial burden on the exercise of free speech because it raised contribution limits only for publicly-financed candidates while imposing lower limits on candidates not participating in the program. Such a distinction, the Court explained, amounted to a penalty on self-financed candidates. 

Similarly, the Second Circuit, here, found that the trigger provisions would force non-participating candidates, who chose to exercise their First Amendment right to spend personal funds on the campaign, to "shoulder a special and potentially significant burden" as they were forced to spend more and more money while the public-financed candidate received more and more public funds.  This substantial burden, the court decided, was not justified by the state's interest in promoting participation in CEP, an interest the court found uncompelling. The court further suggested that, to the extent the provisions were intended to level the playing field, they were unconstitutional under Davis.

The Second Circuit's decision stands in stark contrast to the Ninth Circuit's ruling in McComish v. Bennett, decided a little over a month ago. There, faced with a similar provision in Arizona campaign finance law, the Ninth Circuit decided that it was constitutional to provide additional public funds to participating candidates who faced self-financed opponents that crossed the triggering threshold. Still, the Supreme Court has stayed implementation of the Arizona campaign finance law, and with similar trigger provisions currently before the courts in Wisconsin and Florida, the Court appears poised to take up the issue.

In addition, Bracewell & Giuliani's update points out that "Connecticut's trigger provisions are also strikingly similar to ones found in New York City's public finance plan," and that this decision "calls into question the constitutionality of these triggering events." I am guessing that Davis and these following decisions will begin to chip away at other states' matching fund laws as well.

The next target appears to be Florida's, where Rick Scott, a Republican candidate for Florida Governor, recently filed a federal lawsuit in the Northern District of Florida seeking a preliminary injunction challenging the Florida's matching funds system.  Scott is largely self-funding his campaign and has chosen not to participate in the public financing system, thereby leaving him without spending limits. The state law allows a candidate whose opponent is not participating in the financing system to receive public funding in the amount of the difference between the applicable cap on spending by the participating candidate and the amount of excess (to a limit). Scott is challenging that provision. Last week, a Federal District Court judge ruled against Scott's motion for a preliminary injunction that would have at least temporarily shut down the provision of matching funds until the case was settled. Scott is now appealing to Eleventh Circuit Court of Appeals.